My personal blog about international trade, public policy & politics, pop culture, and stuff that probably interests only me

Tuesday, December 6, 2011

Hooray, Bi-Partisanship... In Support of Higher "Clean" Energy Prices

I've written a good bit lately about the recent push among US companies and politicians for tariffs and other forms of protectionism against imports of "green energy" goods and services. One thing I really haven't gotten into, however, is the blatant hypocrisy of such efforts - which inevitably result in higher prices for the targeted goods and services - when undertaken by politicians who at the same time claim to support "clean" energy and its environmental benefits and/or lower taxes on American families and businesses.

You may recall that the Obama administration's Department of Energy - supposedly a champion of "clean" energy production - actually lamented falling solar prices and Chinese subsidies and blamed them for the failure of the controversial Solyndra. And recently, the administration's Democratic colleagues in Congress have decided to get in on the act. For example, last Friday a group of 58 congressional Democrats - playing off a preliminary determination by the US International Trade Commission related to potential anti-dumping and countervailing (anti-subsidy) duties on imports of Chinese solar panels - sent a letter to President Obama demanding new trade cases against allegedly subsidized Chinese "clean energy" products:

We write to express our concerns regarding very serious allegations of unfair trade practices by the government of China concerning clean energy products. We urge you to take all available measures to expeditiously investigate these allegations and take swift and appropriate action based on those findings...

It is critical for American businesses and workers to be able to fairly compete in this rapidly growing sector... Already an $80 billion annual market, demand for solar panels is anticipated to continue growing as intense competition and technological breakthroughs further drive down prices.

Two of the letter's lead signatories were Rep. Ed Markey (D-MA) and Sen. Ron Wyden (D-OR), and each touted the letter and the ITC determination on his website. Both guys are also - allegedly - big environmentalists who really, really care about things like "clean air" and fighting "climate change." For example, Sen. Wyden's website states:

Protecting the natural environment is one of Sen. Wyden’s highest priorities....

He believes that the Clean Air Act and the Clean Water Act need to be fully enforced in order to keep our environment safe and clean for everyone.

Senator Wyden is concerned with climate change and will continue to oppose bills, such as the 2005 energy bill and the President’s Clear Skies Act, that fail to meaningfully address the problem of global warming. He will also continue to support funding for agencies, like the National Oceanic and Atmospheric Administration (NOAA), that help us to better understand the impact of climate change.

Rep. Markey has expressed similar concerns, breathlessly complaining that the United States' "continuing addiction to oil presents a serious threat to our national security and economy" and calling for federal efforts to reduce greenhouse gas emissions in an effort to mitigate climate change.

So Sen. Wyden's and Rep. Markey loudly support higher clean energy prices via tariffs on Chinese solar panels or the elimination of foreign subsidies for "green" technologies, yet also supposedly support an significant increase in clean energy production (and concomitant reduction in fossil fuel consumption) for environmental purposes. And, of course, the biggest obstacle preventing the proliferation of "clean" energy is - you guessed it - its ridiculously high price compared to traditional energy sources.

Regardless of how you feel about clean energy and climate change, the hypocrisy here is obscene. And one must wonder whether the congressional "environmentalists" who signed that letter to the Obama administration demanding new trade disputes on green energy (and fretting about lower prices caused by "intense competition" and "technological breakthroughs") really care at all about the environment, or just care about funneling cash to their chosen constituents in the unions and "green" energy industry via higher prices paid by US consumers.

The answer to that question seems pretty clear, doesn't it?

Unfortunately, it's not only congressional Democrats who are calling for higher "clean" energy prices in direct contravention claiming to support basic Party principles. For example, Rep. Jeff Landry (R-LA) has sponsored H.R. 2360, the "Providing for Our Workforce and Energy Resources Act" (the POWER Act), which would extend the Jones Act to the installation of offshore renewable energy resources. As you may recall, I blogged on the Jones Act in the context of the Deepwater Horizon disaster. It prohibits shipping merchandise between US ports and performing other maritime activities (such as oil drilling and oil spill clean-up) in US waters "in any other vessel than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States.'' The act essentially bars foreign shipping and other maritime companies from competing with their American counterparts, and recent studies by the International Trade Commission have shown that the Act artificially raises shipping costs by over 20% and imposes hundreds of million dollars in unnecessary costs on the American economy. Another study by the Government Accounting Office showed that it cost American consumers, particularly those in Alaska, thousands of dollars per year.

The POWER Act's extension of the Jones Act to the installation of renewable energy resources like windmills would eliminate foreign competition and, as it's done for all other maritime activities governed by the Act (including offshore production of traditional energy like oil and gas), inevitably raise the prices of energy made from those "clean" resources. As such, it's a tax on American consumers of "clean" energy which discourages such energy and, in the process, lines the pockets of the unions and companies that handle such work. (In his press release touting the POWER Act, Rep. Landry states that "our current economic situation is directly related to high energy prices," and that "we must ensure this energy is made by American workers.” He seems utterly oblivious to the fact that limiting domestic energy producers to American workers will inevitably result in "high energy prices." Oops.)

The POWER Act currently has eighteen co-sponsors, including Republican Reps. Rodney Alexander (LA), Jo Bonner (AL), Jeff Duncan (SC), Trey Gowdy (SC4), Duncan Hunter (CA), Frank LoBiondo (NJ), Candice Miller (MI), Alan Nunnelee (MS), Steven Palazzo (MS), Todd Rokita (IN), Steve Scalise (LA), Steve Southerland (FL), Rob Wittman (VA) and
Don Young (AK). The GOP has long been a supporter of lower taxes, free trade and economic freedom, and it claims to oppose corporate welfare - particularly President Obama's green energy initiatives. So it's odd that these Republicans have dropped the party line in order to support the POWER Act and the higher consumer taxes, corporate welfare (and clear reduction in economic freedom) that it would inevitably produce. In fact, considering the GOP's principled (and correct) stance about expanding domestic production of traditional energy sources, you'd think that these folks would support a blanket repeal of the Jones Act in order to make domestic offshore drilling less expensive, rather than the law's expansion to offshore "clean" energy in order to make that type of energy even moreso.

Then again, when one notices that most of these folks - and their "environmentalist" Democratic colleagues calling for new trade disputes against China - represent the American unions and industries that financially benefit from higher prices for "clean" energy goods and services, their motivation becomes a whole lot clearer, doesn't it?